California Democrat cites stats showing that every year, SEC examines just 9% of the roughly 11,000 RIAs under its purview

The top Democrat on the House Financial Services Committee on Friday called for a hearing to explore ways for the Securities and Exchange Commission to increase its oversight of investment advisers.

In a letter to Rep. Jeb Hensarling, R-Tex., chairman of the committee, calling for the hearing, Rep. Maxine Waters, D-Calif., cited agency statistics that show it examines annually about 9% of the approximately 11,000 registered investment advisers, a rate that has the SEC inspecting advisers about once every 12 years.

“Such an abysmal examination record does nothing to promote confidence in these advisers, let alone in our markets,” Ms. Waters wrote. “Hardworking Americans saving for their future, as well as the investor adviser community, deserve to know that everyone is complying with the law.”

In the letter, Ms. Waters promoted her legislation that would authorize the SEC to charge advisers user fees to fund their exams. The bill experienced a relative surge of co-sponsors on Friday, with 12 legislators joining the seven who previously signed on.

Each of the supporters of the bill is a Democrat, highlighting the biggest obstacle it faces in the House — Republican indifference. A hearing would have to be scheduled by Mr. Hensarling, who sets the agenda for the committee.

A spokesman for Mr. Hensarling was not immediately available for comment.

The user-fee idea has wide support among investment-adviser interest groups. In addition, SEC Investor Advocate Rick Fleming in his first report to Congress last week endorsed the approach as the most effective way for the SEC to increase adviser coverage.

David Tittsworth, executive director of the Investment Adviser Association, said he hopes that both Republicans and Democrats will address adviser regulation.

“We have never viewed this as a partisan issue,” Mr. Tittsworth said. “It would be unfortunate if this became a political football.”

In 2012, then-House Financial Services Committee Chairman Spencer Bachus, R-Ala., introduced a bill that would shift adviser oversight from the SEC to one or more self-regulatory organizations.

In its budget request, the SEC said strengthening adviser regulation is a priority and that increased funding would allow it to hire about 240 more adviser examiners. The House and Senate are taking divergent paths on the SEC appropriation.